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Jennifer Jimenez

Professor Moore

English 1301

7 March 2019

Minimum wage

During the Great Depression, Franklin D, Roosevelt created the New Deal to help

Americans cope with financial impediments. In this New Deal, he created the minimum wage to

help citizens have a living wage that would allow them to pay for their expenses. In 1938

Franklin Roosevelt passed the Fair Labor Standards, the law created a minimum wage of $0.25

cents and over time this salary has been increasing as the cost of living has gone up (Adams).

After creating a standard of living wage, Americans could live a healthier life and afford more

necessities. However, over the past century, the cost of living has skyrocketed, and the federal

minimum wage is $7.25 a salary of $15,000 per year; it is not enough for Americans to afford

housing, clothing, childcare, and other expenses (Lopresti, Mumford). Minimum wage has

become a debatable subject over the century because of the economic consequences.

Raising the minimum wage can have many beneficial outcomes for workers as well as

employers. In San Jose, California there was a wage increase from $8 to $10 back in 2013, and a

study was done to determine whether the increase had negative consequences on restaurants.

Additionally, based on the data and research, they concluded that raising the minimum wage by

25% did not result in notable unemployment in the San Jose area. In fact, raising the minimum

wage in this area had great outcomes for minorities; Hispanics were positively affected by the

salary increase in the California area (Allegretto, Reich). Furthermore, many experts concur that

raising the minimum wage would result in less dependence on government aid. According to
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statistics, 21% of Americans rely on government programs each year and the number continues

to escalate (Adams). For instance, in New Orleans the minimum wage is $7.25; it is

approximately one-third less than the living wage and many in the area need to rely on public

services. Moreover, many lower-paying jobs have a higher turnover rate according to studies

done by Ronald Adams and raising the worker's salary would motivate them to become more

productive and be satisfied with their jobs. Many argue that there would be a substantial

economic calamity if the minimum wage were to be higher, however, the Danish model shows

that a country can flourish even with a high minimum wage of $20 per hour. In other high

paying European countries, we see the same trend of higher wages and a prosperous economy

(Lopresti, Mumford). Ultimately, raising the minimum wage can have positive benefits such as

an employee lower turnover rate, more job satisfaction, and less dependence on government aid.

Opponents say that raising the minimum wage can lead to economic problems and

hiring illegal immigrants to able to pay expenses. According to “Standard of Living As a right

Not a Privilege,” employers will hire illegal workers and pay them lower than minimum wage if

there was an increase in the wages; if the minimum wage were to be higher, this would cause

many Americans to lose their jobs and employers would start hiring illegal workers (LoPresti,

Mumford). Many experts believe if they hired the minimum wage it would remove entry-level

positions because employers would replace workers with automated machines. Many companies

already use automated machines to serve customers and experts agree higher wages would result

in a decrease in employment. Additionally, there is a lot of evidence that when minimum wage

increases it reduces the annual wage growth of low skill workers. According to the article "Who

Benefits from a Minimum Wage Increase?”, many employers will higher the salary of workers

throughout their time in a company and pay them more than if there were a minimum wage
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increase (LoPresti, Mumford). Furthermore, according to the study in San Jose California, when

the minimum was higher the prices for consumers went up by 28% for small business. However,

in big restaurants there was not much of an increase in prices when the salary was raised; it was

estimated that there was a 2% price increase for consumers eating at big business restaurants

(Allegretto, Reich). Usually, raising the minimum wage can have more devastating

consequences on small business than larger business (Allegretto, Reich). Overall, wage increase

leads to more expensive prices to consumers. In the study, it was also concluded that

unemployment rose in those individuals working for small businesses. Opponents say that

raising the minimum wage can lead to job loss, price increases, and burden on small business

(Allegretto, Reich).

Ultimately, both sides have their positive and negative consequences on the topic of

raising the minimum wage. Many proponents of raising the minimum wage argue that

Americans need to earn a living wage and raising the wage would result in more employee

satisfaction. Additionally, they also believe that it would reduce the need for public assistance.

However, opponents believe that raising the minimum wage would lead to economic

consequences and a decline in job openings because workers would be replaced with machines.

Furthermore, they also speculate that it could cause small business to fail because of the increase

in payroll. Finally, the subject of the minimum wage continues to be a debatable subject over the

course of our time period; however, only time will reveal whether Americans will act on passing

reform on this topic.

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Work Cited

Adams, Ronald. “Standard of Living as a Right, not a Privilege: Is It Time to Change the

Dialogue from Minimum Wage to Living Wage?” Business & Society Review (00453609),

vol.122,no.4,Dec.2017,pp.613-639.EBSCOhost,doi:10.1111/basr.12133

LoPresti, John w., Kevin J. Mumford, “Who benefits from a Minimum Wage Increase?’ ILR

Review, vol 69, no.5, Oct.2016, pp.1171-1190. EBSCOhost, doi:10.1177/0019793916653595

Allegretto, Sylvia, Michael Reich, “Are Local Minimum Wages Absorbed by Price Increases?

Estimates from Internet-Based Restaurant Menus”. ILR Review,vol.71,no.1,Jan.2018.35-

63.EBSCOhost,doi:10.1177/00019793917713735
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